Airline bosses believe they will see a rise in yields and profitability over the coming months despite a decline in yields during the second quarter of 2014.
Outlining the results of its July Airline Business Confidence Index, Iata said airline profit expectations for the year ahead were positive even through recent improvements in financial performance had slowed.
The survey’s results indicated that passenger yields declined in the second quarter of the year, compared to the year prior. However, respondents were positive about future growth, with 42% expecting an increase in yields over the coming months. Iata said that was supported by growth in demand.
A quarterly survey of airline CFOs and heads in cargo reflected confidence that airlines would drive profitability and see passenger and cargo volumes expand over the next 12 months, Iata added.
In total 40% of those surveyed said they had seen an improvement or an increase in profitability in the last three months, while 48.9% said they had seen a decrease and 11.1% said they hadn’t noticed a chance in profits.
62.2% said they expected to see an improvement in the next 12 months and only 13.3% are expecting profits to fall.
In the report, Iata said: “Respondents have reported declines in yields during Q2, which is consistent with the pause in recent improvements in airline financial performance. But there is confidence about a rise in yields over the next 12 months, which is the likely driver of the positive outlook for profitability.”
When it came to a change in passenger traffic volumes, 56.3% said they had seen an increase in the past three months and 68.8% said they expected further growth and a rise in volumes over the course of the next 12 months.
Iata also reports that airline employment activity declined during quarter two compared to a year ago, and respondents aren’t expecting any growth in employment for the coming months.
Sourced from Travel Weekly